Quote:
Originally Posted by Soukus
The corporation does what it wants to do. If his corporation want's to buy an over priced property and has the cash to do it with, that's the corporation's problem. Ex: If McDonalds wants a building for its location, and it's over priced by the seller, it can buy it or it can walk.
There is no fraud here. Maybe less than ideal from an ethical perspective, but stuff like this happens all the time on different orders of magnitude.
If his corporation was going to profit $1mil this year, it now will only profit $500K. Everyone is happy, and there is an over-valued asset owned by the corporation. The corp. pay's less tax on profits. The individual pays capital gains and maybe the owner takes home less from the corporation, and pays less in personal income tax as dad911 stated. 5% gains tax versus 35% personal tax....
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OK, so I'm sorta understanding this, but...what prevents EVERY corporation from doing this? Heck, I'll sell my building to my Corp. for $1mil before the end of next Qtr. That should put me in the red for about five or six years. I'm going to get back LOADS on my subsequent tax refunds, no?